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Commentary

Everyone's Got A TV Price: Cablevision, Fox, And Even New York-Area Viewers

Who knew that Cablevision already makes lots of money by running Fox TV programming? At least that's what Kevin Reilly, president of Fox Entertainment, says.

What Reilly was in fact talking about at a recent
industry luncheon in Los Angeles this week was viewership. He says Cablevision video customers pay around $15 a month for broadcast-network retransmission -- which, I'm guessing is about a third
of their overall monthly video bill. Why a third? Because that's around the share levels the broadcast networks have these days.

No, it isn't the 50% or 60% of years ago, but still
30% is nothing to sneeze about.

Reilly's point was that viewers don't really know much about the intricacies of the Cablevision/Fox snafu. But they know this: They contracted with
Cablevision to get certain networks -- cable and broadcast -- and now they are not getting them.

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The value comes from viewers' behavior -- and many still vote, in big numbers, for
specific networks and TV shows. And, shockingly, it isn't just for the MTVs, the USAs, and the TNTs of the world.

Like it or not, Cablevision monetizes broadcast viewership -- even
though this is not a main selling point. Perhaps the company ought to start pushing its retail efforts for broadcasters a bit. Maybe existing Cablevision broadcast network partners -- ABC, NBC, and
CBS -- might give them a little nudge.

Overall, Reilly complains that Cablevision pulls in some $550 million in real dollars because of running broadcast television. But it doesn't want
to part with any of that money -- especially not when it was used to getting this stuff for free. Rumor has it Fox is looking for about $150 million of that $550 million.

Years ago the
argument was that viewers could get broadcasters over the air -- for free. Now viewers can get Fox and others over-the-air with better new snazzy digital antennas, and from other over-the-air services
in the marketplace. But that would require spending even more money for TV. Who wants to do that?

Cablevision only wants to pay Fox at the same rates that Fox gets from Time Warner. Fox
say no deal. It's negotiating not just for its Fox stations but other cable networks as well. Welcome to capitalism.

The World Series has arrived on Fox -- and nothing has changed.
Will the Federal Communications Commission truly get involved in all of this? Will Fox have to pay back national advertisers for expected lower ratings?

Good news for New York-area cable
operator Cablevision and local New York Fox outlets: The New York Yankees couldn't beat the Texas Rangers to get into the World Series. But didn't those pesky San Francisco Giants used to play
in that big cavernous stadium called the Polo Grounds in Gotham, as the New York Giants?

Is Cablevision selling local avails in Fox programming? Or is WPIX selling those avails and reaping the profit from it? Cablevision (and the other MSOs) was granted its monopoly in exchange for agreeing to carry the local stations' signals.

Now, the broadcast networks are tired of living off of single revenue streams and want retrans dollars. The cable nets get dual revenue streams in the form of carriage fees and ad dollars, so the broadcast nets want the same. The problem is that Fox wants triple what they've been getting.

Eventually, they'll get what they're looking for. Cablevision's subscribers will get screwed over by being forced to pay ever higher monthly fees.